ESS Tech (NYSE:GWH) reported a wider second-quarter net loss as revenue declined sharply amid fewer equipment deliveries, while the energy-storage company outlined an expanded push into sodium-ion batteries for data centers, critical infrastructure and utility customers.
Chief Executive Officer Drew Buckley said the company is developing two complementary storage platforms: its new Bridge sodium-ion system for short- and medium-duration applications and its Energy Base iron-flow platform for long-duration storage. ESS said it is redirecting resources toward sodium-ion products while streamlining operations at its Wilsonville, Oregon, facility to reduce expenses and cash burn.
Second-Quarter Results
Cost of revenue was essentially unchanged at $7.5 million, producing a gross loss of $7.4 million, compared with a $5.1 million gross loss a year earlier. Operating expenses increased 19% to $7.7 million, driven largely by a $1.2 million increase in general and administrative expense related primarily to legal costs associated with contingent-liability accruals, as well as an $800,000 increase in research and development spending.
Sales and marketing expenses declined 57% year over year, which Suhadolnik attributed to lower personnel costs, reduced outside services, and reduced marketing and trade-show spending. Research and development expenses rose 55% as ESS expanded the team working on Bridge and its broader technology portfolio.
- Loss from operations was $15.1 million, compared with $11.6 million a year earlier.
- Net loss totaled $15.6 million, or $0.46 per share, compared with $11.1 million, or $0.90 per share, in the prior-year quarter.
- Adjusted EBITDA loss was $7.9 million, compared with a $7.8 million loss a year earlier.
- First-half operating expenses declined 12% year over year to $14.5 million.
- Net cash used in operating activities during the first six months fell 27% to $22.4 million.
Suhadolnik said the second-quarter cost of revenue was largely affected by fixed manufacturing overhead and underutilized capacity at Wilsonville during a period of minimal customer deliveries. She said the figure was not indicative of expected future Bridge unit economics.
Bridge Sodium-Ion Development and Commercial Discussions
ESS said Bridge is a 1.2-megawatt-hour AC modular sodium-ion storage block designed for durations of roughly two to 16 hours. Four units can be combined to provide 4.8 MWh on a standard 20-foot pad, according to the company. ESS said the system is designed for a 20-year life, uses a standard 480-volt AC connection and is intended to be installed as a plug-and-play system.
Buckley said ESS has completed its first sodium-ion module and has begun full charge-and-discharge testing at its Oregon headquarters. The company is targeting its first full-scale Bridge system operating in-house toward the end of 2026, with a system available for customers to view in the fourth quarter.
The company said it sees early-stage sodium-ion opportunities approaching $1 billion, though Buckley emphasized that the opportunities are unconverted and do not represent bookings or contracted revenue. He said the pipeline includes a mix of utility and AI-infrastructure and data-center opportunities.
ESS said it is targeting data centers partly because it believes sodium-ion systems can address safety, permitting and performance considerations for storage located at or near critical infrastructure. Buckley said the non-flammable chemistry avoids thermal-runaway risk and that Bridge is designed to operate across a broad temperature range without complex HVAC or liquid cooling.
Letters of Intent and Supply Plans
Subsequent to quarter-end, ESS signed a non-binding letter of intent with Juniper Energy LLC covering potential deployment of 500 MWh or more of sodium-ion battery storage systems through 2032. The framework is anchored by a planned 10-megawatt, 80-MWh project for a major California utility, targeted for commercial operation in 2027.
The company also signed a letter of intent with Alsym Energy to add 8.5 gigawatt-hours of U.S.-made sodium-ion cells to its supply portfolio. ESS said the prospective arrangement could support a domestically manufactured system and help address tariff, foreign-entity and tax-credit considerations. Both the Juniper and Alsym arrangements were described as letters of intent, rather than definitive agreements.
Buckley said ESS expects the Juniper relationship to progress toward a commercial agreement in coming months, though he did not provide financial terms or a timetable for a final agreement.
Liquidity and Proposed Business Combination
ESS ended the second quarter with $10.8 million in unrestricted cash and cash equivalents, down from combined cash and short-term investments of $22 million at Dec. 31, 2025. The company reported approximately $5.6 million in cash equivalents and short-term investments as of July 31.
The company raised $12.9 million from financing activities during the first half, including proceeds from a January registered direct offering, other financing arrangements and its at-the-market program. Those inflows were partly offset by $14.8 million of repayments on financing obligations.
ESS has repaid $37 million of the original $40 million principal balance under its promissory note with Yorkville. Suhadolnik said the company is pursuing additional financing alternatives and disclosed that its quarterly filing includes expanded discussion of liquidity and substantial doubt about its ability to continue as a going concern.
On Aug. 6, ESS announced a non-binding letter of intent for a proposed business combination with an unnamed private energy-sector company. Buckley said the potential partner has an established operating platform and commercial operations. The contemplated transaction implies a combined enterprise value of about $515 million, with ESS shareholders expected to own about 5% to 10% of the combined company at closing, subject to final valuations and definitive agreements.
ESS expects to seek a definitive agreement by the end of September and is targeting a closing before year-end. Buckley cautioned that the proposal remains subject to due diligence, negotiations, definitive documentation and required approvals, and that the non-binding letter of intent may be terminated at any time.
About ESS Tech (NYSE:GWH)
ESS Tech, Inc (NYSE: GWH) is a Portland, Oregon‐based company specializing in long‐duration iron flow battery energy storage solutions. The company’s core business centers on the design, manufacture and deployment of modular battery systems that store electricity using an iron‐chloride electrochemical process. These systems are engineered to support grid operators, utilities, commercial and industrial customers in integrating renewable power, managing peak loads and ensuring reliable back‐up power.
At the heart of ESS Tech’s offering is its “Energy Warehouse,” a containerized flow battery system featuring non‐toxic, fully recyclable materials and a simple architecture that separates energy storage capacity from power output.
